Terry Smith, the chief executive of the City bonds broker Tullett Prebon, said that his firm would emerge as a winner from the current credit turmoil despite reporting a 16 per cent slide in pre-tax profits to only £57.1 million during the first half.

"We've just had three consecutive record months, one of them within this reporting period," Mr Smith said: "We are one of the few people who benefit from all this."

Mr Smith declined to call the end of the credit liquidity crisis, which, since it began in earnest two months ago, has seen a seizure in parts of the short-term lending market.

Large UK retail and commercial banks have been nervous about extending credit to one another, prompting an offer by the Bank of England to increase cash liquidity by £4.4 billion.

"It is what it is. I would guess that these conditions will persist for some while," said Mr Smith.

He highlighted a profit warning almost a year ago by HSBC over its exposure to sub-prime mortage lending as the first sign something was wrong.

Mr Smith said that volatile conditions in the credit market were ideal for his business, where brokers stand between professional buyers and sellers of bonds, derivatives, equities and energy products.

Tullett Prebon joins Icap, an arch rival run by Michael Spencer, in reporting that trading is booming as market uncertainty prompts banks and other financial institutions to buy more fixed-income and Government debt.

The London Stock Exchange also said today that it was benefiting from market volatility, reporting that trading volumes on its electronic order book, SETS, had surged 141 per cent to nearly 689,000 in August.

The LSE said that, at £9.9 billion, the average daily value of trading, was also a record.

As Tullett Prebon reported its first set of results since being demerged from Collins Stewart last year, it blamed the profits fall on substantial investment in growth.

Mr Smith noted that the broker spent £6.7 million on developments to its TradeBlade electronic trading platform and saw its interest costs rise by £5.5 million as a result of issuing debt last year.

He also highlighted a £30 million bill for buying Chapdelaine, a North American broker, and a £3 million increase in the wages bill as a result of new hires over the past six months.

Tullett shares slipped 1.75p to 413.25p. The broker is capitalised at more than £880 million.

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